Long term investment - 2013

8/18/2019 Long term investment - 2013

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ng term investment - 2013

Bells don't ring to announce market tops and bottoms. But occasionally, men doclimb into the belfry and do it.

What do corporate profits as a percentage of GDP tell us? They tell us whatpercentage of the country's annual GDP wind up in the hands of shareholders. If

the number is too low, there won't be enough profits. Businesses will shut down,

competition will reduce, and profitability will start to rise.

What if the number is too high? The reverse will happen. Competition will come

in to earn the extra profits, capacities will go up, there will be a fight for market

share, and profitability will now start to fall.

In short, enough corrective measures are in place to ensure that corporate

profitability stays neither too low nor too high. There is always a reversion to the

mean.

If aggregate profit margin is such a reliable indicator, how about using it in the

Indian context? Indian stocks are famous for giving 15% returns over the long

term. It can this be improved by a few percentage points by capitalizing on the

phenomenon of reversion in profit margins. And the current environment

provides a great opportunity to do so.

The aggregate data have pulled for Nifty companies suggests that profit margins

were at a ten-year low at the end of FY15. Even if, they were to rise to the average

of the last ten years, not immediately, but three years out, the upside would close

to 70%. Put differently, markets will go up 70% over the next three years if profit

margins revert to the mean.

I vesti g is a game f pr babilities, t certai ties. Over the l g term, th ugh,

i creasi g y ur exp sure t equities whe the dds are i y ur fav ur is likely t

pay rich divide ds. A d despite the rece t ru up i st cks, the dds are certai ly

i y ur fav ur curre tly.


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Below 2 chart are shows actual return with compare of Stocks vs Nifty vs Midcapvs Smallcap

Terms & Conditions to follow

1. Every month invest 1 stock in MidCap / SmallCap as I recommend.

2. Holding duration minimum 3 years and maximum depend on capacity 3. Buy only recommendation market price or below

4. Invest in business not in price for long term multiple returns.

If, Nifty 50 / Sensex 30 stock can improve growth rate of 70% then why

invest in that stock. Earn higher returns in selective stock of MidCap /

SmallCap stocks.

For more details contact me.


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Reco Date 15th Jan, 2013

Reco Price (adjusted price of split 5:1) Rs. 134.00/-*

Profit booked date 25th Jul, 2014

Profit booked price Rs. 700.00/-

Total returns 422.39%

About company

PI Industries was incorporated in 1947 as Mewar Oil & General Mills Ltd. It was rechristened as PIIndustries only in the 1990s. It now focuses on agri-inputs and custom synthesis. The agri-inputs

division offers plant protection products, specialty plant nutrient products and solutions. With a

distribution network of over 40,000 retailers, PII has a strong rural reach across the country.

The customs synthesis division offers contract research and production of agrochemicals,intermediates and other niche fine chemicals for global innovators. This line of business especially

is backed with a strong R&D support. It works to develop and commercialize products based on

newly discovered chemistries with reputed MNC innovators. With a strong order book of over US$

300 m, the company is a leader in custom synthesis of agrochemicals and specialty products. Its

recent tie up with Sony Corporation has given it an entry in the niche space of organic chemicals

for electronics.

Key management personnel

Mr Salil Si ghal, Chairma a dMa agi g Direct r

, is the promoter of the company. He has

served as the Chairman of the Pesticides Association of India, for nearly 20 years. He was

subsequently elected as Chairman Emeritus for life. He was a member of the Executive

Committee of the Federation of Indian Chamber of Commerce and Industry (FICCI) and the

Chairman of FICCI's Environment Committee for 5 years. Mr Singhal has been associated with CII

and presently he is Co-Chairman of CII National Council on Agriculture. He is a graduate from St

Xavier's College, Mumbai.

MrMaya k Si ghal, Ma agi gDirect r a d CEO of PII since 2009. He has served as the JointManaging Director of the company since 2004. Mr. Singhal is a graduate engineer from

Engineering Management, London.

Industry Prospects

Agriculture is the backbone of the Indian economy. A large and constantly growing population

base has led to a growing need for food. At the same time, the cultivable land resource has been


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declining. Therefore the need to increase yields from existing resources has become even more

critical. The Indian government is concerned about the food security. It has set an ambitious target

of 4% agricultural growth for the 12th 5-year plan (2012-17). But despite the threat to productivity,

India is one of the lowest per capita consumers of pesticides. One of the reasons for this low usage

is low awareness as well as low affordability. However with increasing awareness as well as rising

rural incomes, this industry is expected to witness robust growth in the future. The CMIE (Centre

for Monitoring Indian Economy) expects the crop protection industry to grow at a compounded

annual growth rate of 10 to 12% in the future.

Globally companies have realized the need for cutting down on costs. As product lifecycles aregetting shorter, need for outsourcing as a way to reduce costs and improve process efficiencies, is

gaining more and more relevance. As per the management, the global fine chemicals industry is

estimated to be around US$ 300 bn by 2015 which is a growth of nearly 8% on a CAGR basis. Of

this custom synthesis and manufacturing forms around US$ 85 bn. Currently India accounts for

just 5% of the business globally. As a result, the industry in India is expected to grow at a fastertick of around 12% CAGR in the future.

Investment Concerns 1. Monsoons could play party proper

2. Marginal farmers may not come on board

3. Customers could walk out

4. Currency risks

Investment Rationale

1. Huge untapped market

2. Strong distribution network 3. Opportunities in the custom synthesis space

Mr. Salil Singhal, Chairman and Managing Director , PI Industries Ltd. Featured in Business Today - Dec

2014 Issue - India's Best CEO's

http://c/Users/Market_01/Desktop/pp.jpghttp://c/Users/Market_01/Desktop/pp.jpg


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Reco Date 15th Feb, 2013

Reco Price Rs. 400.00/-

Profit booked date 3rd Aug, 2015



About company

Honda Siel Power Products (HSPP) formerly known as Shriram Honda Power Equipment Ltd was

incorporated in 1985. It was then a joint venture (JV) between Honda Motor Co. (Japan) and UshaInternational, with 67% equity stake held by Honda. Usha International sold off its stake to Honda

in 2012.

HSPP is involved in the manufacture and sale of portable power generating sets, multipurposeengines, water pumping sets, brush cutters and lawnmowers. The company exports to over 40

countries and exports comprised approximately 15% sales in FY12. With strength of over 800

dealers and 15 area offices spread across the country, HSPP has a customer base of more than 1.5

m customers, making it the leader in portable generators. Currently, the company operates two

plants in India - one in Greater Noida and the other one in Pondicherry, with installed capacity of 2,70,000 genset units. Birla Power Solutions is HSPP's key competitor in the portable genset space,

while it competes with Bajaj Electricals, Greaves Cotton, Kirloskar Brothers and CromptonGreaves in the water pump segment.


Mr. Takashi Hamasaki has bee the Chief Executive Officer and President of Honda Siel PowerProducts Ltd. since April 2010. Mr. Hamasaki has been a Director at Honda Siel Power Products

Ltd. since April 01, 2010. His total annual compensation at HSPP was Rs 88 lacs in FY12.

Mr. Vi ay Mittal serves as the Chief Fi a cial Officer of Honda Siel Power Products Ltd. and has

been its Vice President and Executive Director since April 2, 2012.

Industry Prospects

Indian power backup equipment market comprises of generators (54%), UPS (24%) and inverters

(22%). The generator market itself is estimated at Rs 80 bn in FY13 of which portable generators

have 10% share. Over the last few years, the genset market on the whole has witnessed slower

growth due to competition from inverters. However, with chronic power shortages and prolific

growth in industries, infrastructure, telecommunication, IT and IT enabled services; the demand

for large capacity power backup systems is expected to remain steady. As per Netscribes, by 2020,


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the worldwide genset market is expected to nearly double in value to reach US$ 22.3 bn. This will

be average annual growth of 7.1% from 2011 to 2020. The Indian genset industry in particular, is

expected to grow from US$ 1.4 bn to US$ 2.5 bn.

Investment Concerns

1. Competition from invertors

2.

Impact of steep diesel prices

3.

Low bargaining power


1. Growing market share

2. Cost benefits of localization

3. Strong cash flows and balance sheet to accommodate capex

4. Parent's backing and commitment:


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Reco Date 15th Mar, 2013


Profit booked date 1st Sep, 2014



About company

Natco Pharma Ltd was incorporated in Hyderabad in the year 1981 with an initial investment of Rs

3.3 m. With a modest beginning of operations as a single unit with 20 employees, Natco today has

five manufacturing facilities spread across India with dedicated modern research laboratories and

capabilities in new drug development. The company derives its revenues from domestic as well as

international markets and manufactures both APIs as well as formulations. The company focuseson the development of oncology drugs and complex molecules. Natco was the first Indian

company to get compulsory licensing for a cancer drug Nexavar. Natco has various tie ups with

domestic as well as international companies in order to market its drugs in the international

markets. The company had also raised funds worth Rs 675 m through QIP some time back largely

for the purposes of capex for its manufacturing facilities.


Mr. V. C. Na apa e i, Chairma a d Ma agi g Direct r

, has over 42 years of experience in the

pharmaceutical industry. He has worked in the US for more than a decade in various

pharmaceutical companies. He holds Bachelors and Masters Degree in Pharmacy from Andhra

University, Vishakhapatnam, India. He also holds a Masters degree in PharmaceuticalAdministration from the Brooklyn College of Pharmacy, US. Along with other business segments

he also administers the New Drug Discovery programme of the company.

Mr. Rajeev Na apa e i, Vice Chairma a d CEO, has worked at Merrill Lynch in the past and

has been associated with Natco over 12 years. He has got wide experience and exposure in General

Management, New Business and New Product Development in international markets. He takes

care of all the functional operations of the company including new drug launches, filing of

ANDAs, domestic and international marketing, exports, imports, production, finance, quality etc.

He played an instrumental role in the company getting the first ever Compulsory License in India

for an anti cancer drug Sorafenib. Natco Pharma under his leadership successfully challenged

various complex litigations. He has helped the company in developing good and successfulbusiness strategies. He holds B.A degree in Quantitative Economics & History from Tufts

University, USA.

Dr. P Bhaskara Naraya a, CFO a d Direct r

has rich and varied experience in finance, secretarial

and legal disciplines spanning over more than three decades. He is a Fellow Member of ICWAI

and ICSI, Gold Medalist in Law, Masters in Commerce and Business Administration. He is a CMA -

Member of Institute of Certified Management Accountants of the Institute of Management


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Accountants, USA. He was awarded a Doctorate in Business Management from Kakatiya

University in the year 2010.

Industry Prospects

The Indian pharmaceutical market grew by 16% in FY12 with volumes contributing 8.1%, new

products contributing 4.5% and price 3.4%. While the chronic therapy segments continued their

buoyancy, recording a healthy growth of around 18%, the acute therapy segment grew by 15%.

It is estimated that by 2020, the Indian pharma industry is expected to grow to US$ 55 bn. The

major trends that will influence the growth of the market over the next few years will beincreasing disposable income, growing number of middle class households, expansion of

healthcare infrastructure, penetration of healthcare insurance, rising incidence of chronic diseases

and expanded healthcare access to rural and semi urban markets.

The life style segments such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers willcontinue to be lucrative and fast growing owing to increased urbanisation and change in lifestyle

patterns. High growth in domestic sales in the future will depend on the ability of companies to

align their product portfolio towards the chronic segment as the lifestyle diseases likehypertension, congestive heart failure, depression, asthma, and diabetes are on the rise.

Semi-urban and rural markets are emerging as the new growth drivers in the domestic market.

With high per capita income and increasing access to modern medicine, this segment is expectedto continue its strong growth momentum. With the introduction of the product patent law in 2005,

the Indian market has emerged as an attractive option for research and drug delivery system

based products. In-licensing would provide an attractive option for companies with strong

distribution reach and excellent brand recognition. Overall, pharma companies will continue togrow through acquisitions, joint ventures, leveraging low operational costs and outsourcing.

With the governments in the developed markets looking to cut down healthcare costs by

facilitating a speedy introduction of generic drugs into the market, domestic pharma companieswill stand to benefit. However, despite this huge promise, intense competition and consequentprice erosion would continue to remain a cause for concern.

The developing markets viz., Brazil, Turkey, Mexico, Russia and the like are expected to witness

growth of around 25% during 2014-15. Like India, emerging markets are also "branded" by nature,

thus Indian companies are well poised to capitalise on the opportunities in these markets as well.

The NCE and NDDR space is expected to provide opportunities going forward and has been the

focus area for domestic pharma companies owing to the introduction of the product patent law,increasing competition in the generics space, huge opportunities in therapeutic areas of large

unmet needs and the drying research pipeline of Big Pharma. However, given that R&D is a high

risk, costly and time consuming affair; many domestic pharma companies are adopting a host of strategies to mitigate the risks involved in the same such as out-licensing molecules in return for

milestone payments and entering into collaboration agreements with global innovators to conductresearch.

Investment Concerns

1. Teva's new version of Copaxone

2. Currency movement

3. More companies targeting compulsory licensing route


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4. Call off of deals with partners


1. Focused oncology portfolio

2. Compulsory licensing - future growth driver

3. New strategy in the US to boost growth

4. The Copaxone kicker

5. Other tie ups:

6. RoW markets contribute too

7. API segment, an important contributor:8. Targeting biosmilars in the long run

:


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Reco Date 15th Apr, 2013


Profit booked date 11th Jun, 2014


Total returns 9.74%

About company

Tribhovandas Bhimji Zaveri (TBZ) is one of the leading jewellery retailers in India. The company has its manufacturing facilities in Maharashtra. The company first started with its showroom in

Zaveri bazaar in Mumbai in 1864. With 24 retail stores it has a presence across 18 cities in the

country. The company mainly sells gold jewellery and diamond studded jewellery. Other products

sold include platinum jewellery and jadau jewellery. It focuses on both wedding as well as the

fashion segments of the industry.

The jewellery company has its own manufacturing facilities for diamond studded jewellery. It

even outsources a part of its production apart from buying from third parties. The company

follows a policy of procuring jewellery from all across India with a view to understand regionalpreferences and have variety in their offerings. A dedicated team of 28 designers are involved in

designing the jewellery. These include people who are skilled in computer aided designing too.Over the last 5 years, the company has grown its revenues at a compounded average growth rate

(CAGR) of 35%. During the same period, net profits have grown at a CAGR of 50%. The diamond

jewellery segments contribution to overall revenues has grown from 17% in FY09 to 25% by the

end of December 2012. This is because of two reasons; growing customer preference for diamond

jewellery (especially low cost diamond) and higher profit margins of diamond jewellery as

compared to gold.


Mr Shrika t Zaveri, is the Chairma

and Managing Director of the company. He has over 30 years

of experience in the jewellery retail sector. He is the founding member and chairman of the Gems

and Jewellery Trade Federation.

Mr PremHi duja, Chief Executive Officer, has been with the company since 2004. He took over

his current role in 2013. Prior to joining TBZ, he has worked with companies like Kamat Hotelsand Shaw Wallace Ltd. He holds a bachelors degree in commerce from Mumbai University. He is

a qualified Chartered Accountant, Company Secretary as well as a Cost Accountant.


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Industry Prospects

The jewellery retailing industry in India is expected to grow at 10-12% CAGR up to 2015. Like any

other retailing industry, this segment too is still largely dominated by the unorganized players.

Branded players have just 10% of the overall market share. However, growing awareness among

customers about certified jewellery is raising demand for branded products. To benefit from this,

jewelers have been expanding their operations across India.

Jewellery is sold under two major sub segments- gold and diamonds. Within this, gold constitutes

80% of the value of jewellery consumption and remaining 20% comprises of diamonds and othergemstones. The consumption of gold has nearly doubled over the past two decades. This is because

gold is also considered as a time-tested investment-class asset. However, jewelers these days are

focusing more on diamond and stone studded jewellery. This is because such stone studded

jewellery helps them earn 3 times more margin than plain gold jewellery. There is a visible shift

in the product mix of Indian jewelers over last few years.

Globally, US accounts for largest consumption of jewellery. However, post the economic crisis in

2008-09, sales have significantly dropped there. Thus China, India Middle East and Japan now contribute a larger proportion (around 38%) of the overall consumption of jewellery in the world.

There is ample scope for growth in these emerging countries in the future too.

In India, both organized players from the listed and unlisted space are opening newer stores inregions across the country. Jewellers are focusing on launching operations in under penetrated

tier II and tier III towns. Higher disposable incomes, rising young population, higher percentage

of working women are some of the factors that have led to increased demand for gold and stone

studded jewellery in the country. Also, gold is considered as an alternate investment avenueespecially in times of economic downturn.

Investment Concerns

1. Execution of expansion plans is a challenge2. Concentrated sales in western and southern India3. Intense competition

4. Macroeconomic risks and high gold prices adversely impact demand

5. Attrition rate

6. Regulatory concerns


1. Focus on wedding jewellery 2. Steadily improving profit margins

3. Shifting to gold lease will expand margins

4. Own manufacturing facilities5. Under penetration of branded jewelers


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Mr Sa deep P. E gi eer - F u der a d Ma agi g Direct r - He is a Chemical Engineer. He started

his career as Project Engineer in Cadila Laboratories Limited. Further he promoted a

proprietorship concern M/s Shree Chemicals in the year 1986, which was operational for about 10

years. In the year 1992, he promoted Kairav Chemicals Private Limited, a pharmaceutical venture

for the manufacture of bulk drugs. Then he diversified into the business of plastic pipe industry by

collaborating with Specialty Process LLC.

Industry Prospects

The size of the Indian plumbing industry is estimated to be around Rs 200 bn. From being mostly a galvanised iron market in the 1990s, the plumbing pipe and fitting market has evolved to a mix

of nearly equal PVC and galvanised iron with CPVC having minor presence. PVC has grown in

preference over galvanised iron due to superior properties such as lower cost, less weight, easier

and faster installation, no corrosion or scaling, no leakage and long life. CPVC is an advanced

material which costs 15% more than PVC, but scores over PVC in certain properties such as wideroperating temperature range, greater bacteria resistance and longer life. CPVC is gaining greater

acceptance in the market, especially in projects with better construction quality.

Demand of PVC/CPVC pipes is expected to remain strong owing to increasing population and

urbanisation which results in massive need for drinking water supply and sanitation. The Indian

government's focus on irrigation to increase the agricultural productivity also drives demand for

pipes. Increasing applicability of PVC pipes for different purposes also results in incrementaldemand.

PVC/CPVC pipes are also increasingly being used in the real estate sector. Over the next few years,

it is expected that there will be a shortage of more than 25 m housing units which should furtherspurt the demand of PVC pipes. Besides this, increasing acceptance of CPVC pipes as a substitute to

traditional GI pipes further supports the demand. Even with the current slowdown in the real

estate sector, the demand for CPVC is expected to remain firm on account of the huge

replacement demand.

Investment Concerns

1. Heavy dependence on single supplier

2. Raw material price volatility and forex impact

3. Slowdown in the economy

4. Loss-making subsidiaries and joint ventures


1. Strong alliances create high entry barriers

2. Fast growing CPVC market

3. Strong branding and marketing4. Robust growth and healthy returns


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Reco Date 15th Jun, 2013


Profit booked date 30th Dec, 2015



About company

The history of Talwalkars can be traced back to 1932 when the late Mr Vishnu Talwalkar set up

the first ever gym. The tradition was continued by his son Mr Madhukar Talkwalkar who set up his

first gym in 1962. Since then he and his family have worked endlessly to creating the brand thatexists today. In 2003, TBVFL came into existence as a joint promotion between the Talwalkar

Group and the Gawande Group. Today Talwalkars is a leading brand and holds the crown as

India's largest chain of health centers. At the end of March 2013, it had around 144 centers in 75

cities.

After expanding its presence by increasing the number of centers, the company is now looking at

increasing the utilization of its centers to deliver higher profitability. The new initiatives like

Zumba, NuForm and Reduce are aimed at leveraging the company's current asset base and

enhancing the number of members. As these initiatives enjoy a premium pricing, they are

expected to boost margins and therefore profitability in the future.


MrMadhukar Talwalkar, is the Executive Chairma

of the company. He has over 50 years of

experience in the health and fitness industry. He is also serving as the President of Maharashtra

State Body Builders Foundation. Mr Talwalkar holds a bachelor's degree in Textile Engineeringfrom Veer Jijamata Technical Institute, Mumbai.

Mr Prasha t Talwalkar, is the Ma agi gDirect r a d CEO. He has over 25 years of experience in

the area of marketing of health clubs. The health clubs and spas of Talwalkars Pantaloon Fitness

Pvt Ltd have been under his supervision. He holds a bachelor's degree in science from University

of Mumbai.

MrA a t Gawa de, is the Wh le TimeDirect r a d the Chief Fi a cial Officer of the company.

He has over 20 years experience in the finance industry specializing in various fields of finance

including leasing and hire purchase finance, investment banking, portfolio advisory services and

general banking service. He is a fellow member of the Institute of Chartered Accountants of India

since 1989.


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Industry Prospects

As per the company, the Indian fitness and slimming market is estimated at around Rs 40 bn, of

which fitness services account for more than 50% share. The industry has been growing at a

compounded annual growth rate of 20% over the past few years. One reason for this is the low

penetration in India. As compared to other countries, the penetration levels in Indian fitness

industry are low and hence there is a huge scope of growth.

With increasing health and fitness consciousness, growing middle class, high share of young

population and rising disposable incomes, the Indian fitness industry is poised to grow. However,the fitness and wellness industry in India is highly competitive and fragmented. Thanks to a high

degree of fragmentation, low product /service differentiation and price sensitiveness amongst

customers, the industry is marked by price competition and low margins. The bargaining power

with a supplier is really low and switching costs for the customers are negligible. As such, due to

these factors, the key differentiating factors for successful players will be differentiation in theservices and a strong brand value at competitive prices.

Investment Concerns 1. Intense competition

2. Negative free cash flows and asset heavy model

3. New offerings may not take off as expected

4. Equity dilution risks5. Seasonality


1. Best placed to make the most of underpenetrated fitness market2. Experienced and efficient management

3. New initiatives expected to improve margins and returns on capital

4. Robust financials


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Industry Prospects

Basmati rice is considered to be one of the most expensive varieties of rice in the world. India and

Pakistan are the only major suppliers of basmati globally with the Indian variety superseding that

of Pakistan in quality terms. As such Indian basmati rice has enjoyed a premium in the global

markets. As per APEDA export volumes for Indian basmati rice has grown at an average of 24%

over the past 5 years.

Even going forward, the demand from the export markets is expected to continue at a healthy pace.

Changing lifestyles and increasing middle class population has helped drive demand in thedomestic markets as well.

The sector was earlier regulated by the government through the MEP (Minimum export price).

However, in July 2012, the government has decided to do away with the same.

Investment Concerns

1. At the mercy of the Rain Gods

2. Working capital tends to remain high3. Raw material risk

4. Geo political risk is high

5. Currency variation


1. Strong brand and market leadership position

2. Demand remains robust

3. Seed development and contract farming helps quality control4. Storage and warehousing capabilities

5. Energy a boost

6. Rewarding shareholders


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Reco Date 14th Aug, 2013Reco Price Rs. 260.00/-

Profit booked date 19tth Sept, 2014



About company

Tree House Education & Accessories Ltd operates the maximum number of branded self-operated

preschools in India. THEAL was originally incorporated as a private limited company in 2006. In

2011, it came up with an initial public offer of Rs 1.1 billion. Currently, the company operates a

network of 410 branches across 50 cities, of which 75.6% are on a self operated basis.

For self-operated schools (SoS), the company takes properties on lease-and license basis for a

period of three-to-five years. The company earns revenues mainly from the admission and tuition

fees from SoS. Some of the centres offer daycare facilities as well. Besides, the company operates35 teacher training academy that provide qualifications to be a teacher at a preschool. As such, a

part of its revenues are generated from teacher training. It charges one time upfront fees and an

annual service from the franchise preschools. Sale of educational kits in SoS and franchise schools

is also a source of income for the company. Rentals, employee costs and marketing expenses are

the key cost components for the company.

THEAL also provides educational and consultancy services to around 24 K-12 centres (primary to

class XII) across the states of Maharashtra, Rajasthan and Gujarat and earns consultancy feesbased on the services provided and students enrolled. Recently, the company has launched

initiative of opening Global Champs preschools. These preschools aim to providing pre-primary

education at affordable price points. The company has also completed the acquisition of

Brainworks brand and its operations to expand its franchisee footprint.


Mr. Sa jay Kulkar i is the Chairma of the company. He has approximately 30 years of experience in the financial services and consumer durables industry. He has worked for Citibank,

India from 1973-1980 and was involved in investment banking and managing corporate

relationships. He was also the Chairman of the Equipment Leasing Association from 1993-1995.

Mr. Kulkarni previously managed Century Direct Fund, one of the earliest private equity funds for

investment in growth companies in India and also promoted 20th Century Finance CorporationLimited.

Mr. Rajesh Bhatia is the Ma agi g Direct r of the Company. He holds a bachelor of engineering

degree in computer science from MS University, Baroda and Masters of Business Administration

from Pune University. Mr. Bhatia has approximately seven years of experience in the education


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industry. He has been associated with the company since its inception and oversees the day to day

operations

Industry Prospects

Preschool is a niche and unregulated segment in India within the broader education sector.

Preschools precede the formal education and cater to the group of one to six year old children and

offer playgroup, nursery, junior kindergarten and senior kindergarten classes.

The industry has low entry barriers and faces huge competition from the unorganized segment.The awareness level regarding importance of preschooling is low in non urban areas. This leaves

around 74% of the rural market in relevant age segment as unadressable (as per census 2011) for

the lack of viability. As per CRISIL estimates, just 10-15% of the urban population in the 2-4 years

age bracket enroll in pre-schools in the country. Thus, even the urban areas are quite

underpenetrated. However, the scenario is changing with growing importance of education for achild in the first five years of life. This is well reflected in the improving pre-primary gross

enrollment ratio (GER) in India. That said, GER in India is lower as compared to other major

countries in the world. Hence, there is a huge potential for the industry to grow.

As per CRISIL estimates, the preschool business is likely to grow at a CAGR of 25% between the

year 2010-2015. It expects organized preschool market to grow at a CAGR of above 45% (from

2009-10 to 2015-16). This implies that the share of the organized market is expected to increasefrom 11% in 2009-10 to 34% in 2015-16. The main growth drivers for this business are favorable

demographics. These include rapid urbanization, high share of youngsters in the population,

rising disposable incomes in the urban areas, an increasing trend of nuclear families and both

parents working. Besides, the increasing focus on children's education is likely to boost the growthprospects for this industry.

Investment Concerns

1. Popular in Mumbai but will it be equally popular elsewhere2. Competition is sizzling3. Smaller town payback period may hurt margins

4. Capex heavy model

5. Promoter shareholding does not provide any comfort


1. On a high growth trajectory

2. Strong brand3. Robust financials

4. Demand scenario looks bright

5. Other initiatives to improve realisations6. Asset turnover ratios expected to improve


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Industry Prospects

1. Regulatory issues

1. Cut throat competition


1. The Watson kicker

2. Identifying a niche - Ophthalmology

3. Exports momentum to strengthen

4. The Indian scenario5. Decent balance sheet


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Reco Date 15th Oct, 2013


Profit booked date 25th Mar, 2015



About company

Kolte Patil Developers Ltd (KPDL) is a leading real estate developer in Pune and its investments inthe city are spread across sub markets. The company has consistently been a market leader in Pune

with its market share varying between 7% -11% over last two years. It has delivered more than 7

million square feet (msf) in Pune so far.

Further, its projects are spread across the price spectrum and its range includes affordable homes,middle income group (MIG) Township /non township, premium housing and townships. Of the

total, MIG segment enjoys the highest share of around 60%-65%. Post Lehman crisis, KPDL has

consciously realigned its portfolio to focus more on the residential segment. KPDL's portfoliocurrently contains the mix of the residential and commercial projects in the ratio of 90:10.

Historically, the company has been conservative in taking debt and this approach has motivated it

to enter private equity tie ups. The PE investments so far are plain vanilla equity with noguaranteed IRR (internal rate of return) structure. Of the total area of 9.4 msf of projects under

execution, KPDL's share stands at 5.4 msf (around 57%). Including the forthcoming projects and

future potential, KPDL saleable area stands at around 28.2 msf. Of the total saleable area, 92% is

based in Pune while the rest 8% is in Bangalore. The company has recently forayed into Mumbaiwith the initial focus on low risk society redevelopment project. As per the management, the move

is likely to reduce the working capital cycle. The company outsources its construction to multiple

partners depending upon the product type.

The company in the past has taken some decisions that suggest strong management qualities. PostLehman crisis, the company has consciously reduced its exposure to the relatively riskier

commercial segment. The management is also focused on positive operating cash flows and is

conservative about debt which gives us comfort with regards to its risk profile. To further improve

transparency, the company has appointed Deloitte and KPMG as statutory and internal auditors

respectively.


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Mr. Rajesh A irudha Patil, Chairma a d Ma agi g Direct r

, holds a degree in Civil Engineering

from the University of Mysore and has more than 20 years of real estate experience. He is

responsible for the business development, land procurement, funding requirements and strategic

decision making for the various projects undertaken by the company. He has been associated with

KPDL since its inception as its promoter.

Mr. Mili d Digambar K lte, Executive Direct r, holds a degree in Law from the University of

Amravati and a degree in Commerce from University of Nagpur. He has more than 20 years of experience in the field of real estate development and is responsible for handling the day to day

operations, legal matters, procurement of land and construction activities.

Mr. NareshA irudha Patil, Vice Chairma , holds a degree in Commerce from the University of

Pune. He has more than 20 years of experience in the field of real estate development and isresponsible for the handling of all the Bangalore-based projects.

Industry Prospects

1. Delay in the approvals/ launches or project execution

2. Concentration risk with over 90% of business in Pune

3. Oversupply may lead to price erosion4. Increase in the input costs could pull margins

5. Regulatory and policy risks


1. Healthy project pipeline lends revenue visibility

2. Focus on maintaining positive operating cash flows

3. Healthy land bank across markets in Pune

4. Location advantage5. Regulatory upsides


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Reco Date 14th Nov, 2013

Reco Price (adjusted price of split 10:5) Rs. 140.00/-*Profit booked date 13th Apr, 2016



About company

For more than two decades, Atul Auto Ltd. has been a renowned leading manufacturer of

3-wheeler commercial vehicles in the state of Gujarat. The company manufactures 3-wheelers in

the sub 1 tonne category targeting the passenger and cargo segment. In passenger segment, thecompany manufactures the Diesel & CNG powered carrier for carrying 3 to 6 passengers. In the

cargo segment, the company manufactures vehicles with a rated carrying capacity of 0.50 tonne.Both these vehicles have been approved by the Automotive Research Association of India under

the Bharat Stage-III. The company has improved its market position in the domestic 3-wheeler

industry (third large player in 0.5 tonne three wheeler industries). This has happened withestablished distribution network, increase in capacity and launch of new products. The company

has 150 exclusive dealers, more than 100 sub-dealers, 14 regional offices and 3 training centres in

16 states of India. The company's existing products are various types of front engine & rear engine

three wheelers under the brand name Atul Shakti, Atul Gem, Atul Smart & Atul Gemini-Dz.


Mr. Jaya tibhai J. Cha dra is one of the founder promoters and Chairma & MDof the company.

He is an Undergraduate with a wide experience in automobile industry of more than 36 years.Presently he is one of the Promoters of the company. He began his career as a manufacturer of

carrier Auto Rickshaw under the brand name 'KHUSHBU' under his family firm Atul Auto

Industries, Jamnagar and acquired expertise in automobile manufacturing and marketing. Helooks after substantial administrative part in the organization. He was appointed as Director on 18

June, 1986 and since then he was reappointed as Managing Director of the company.

Mr. Mahe dra Jam adas Patel, is the Wh le-time Direct r of the company. He is an

Undergraduate and is one of the promoters of the company with an experience of more than 19

years in manufacturing and assembling of automobiles. He has worked as a Director-Production in

Sunrise Soaps and Chemicals for 3 years. Presently he looks after whole of the production

department of the company.

Industry Prospects

As per ICRA, the three wheeler (3W) industry is expected to report a volume CAGR of 7-8% over

the next five years. In the domestic market, the 3W passenger segment is expected to benefit from

product upgradation and opening of fresh permits by state governments. Although facing stiff

competition from 4W small commercial vehicles (SCVs), the 3W goods segment is expected to

reap the benefits of operating economics for first time users. Exports are also expected to be a key


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Reco Date 14th Dec, 2013


Profit booked date 13th Apr, 2016



About company

Zensar Technologies, an RPG group company, is among the top 15 software companies in India by

revenues. The company has expertise in enterprise applications, business intelligence, data

analytics, customer relationship management (CRM) and business process outsourcing (BPO). Itderives its revenues mainly from the manufacturing, retail, insurance and healthcare industries.

The US is the largest contributor to revenues while the global networking giant Cisco is its largest

customer. Zensar's primary service lines are application development and maintenance (ADM) and

Infrastructure Management Services (IMS). ADM contributes about two-thirds of the revenues.

The management believes in sticking to what they do best. They have been conservative in their

outlook and have not taken too many risks that could have adversely affected the business. The

company has not expanded aggressively into unknown geographies and has not taken on too

much debt. The management's desire to focus on niche segments within their service lines to

smartly deal with competition, has certainly worked for the company in the past. The effort to

move away from the infrastructure products business can be expected to hold the company in goodstead.


Dr. Ga eshNataraja , Vice Chairma a d CEO

, is an alumnus of IIT Bombay and the Harvard

Business School. He chairs Innovation, Intellectual Property and Knowledge for the Confederationof Indian Industry (CII) and is a member of the Chairman's Council of the software industry

association, NASSCOM. He was Chairman of NASSCOM in 2008-09.

Vivek Gupta, Chief Executive a d Head, Gl bal I frastructure Ma ageme t Services, holds a B.Tech degree from IIT Delhi. He is also an alumnus of the Wharton School, Philadelphia (USA)

and the Indian Institute of Management, Ahmedabad. He has been with Zensar for the last 27 years. He had played the key role in developing global delivery operations for Zensar before

taking on his current role.

Investment Concerns

1. The Akibia acquisition

2. Dependence on the US


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Documents

Long term investment - 2013